Georgia - Land Acquisition and Compensation Framework

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SOUTH CAUCASUS PIPELINE

















Georgia
-

Land Acquisition and Compensation Framework























































TBILISI 2012



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Table of Contents

1

INTRODUCTION

................................
................................
................................
.....................

7

1.1

P
URPOSE OF THIS
D
OCUMENT

................................
................................
.............................

7

1.2

A
BBREVIATIONS

................................
................................
................................
..................

7

1.3

K
EY
D
EFI
NITIONS
................................
................................
................................
................

8

1.4

C
OMMITMENTS
R
EGISTER

................................
................................
................................
...

9

2

PROJECT DESCRIPTION

................................
................................
................................
.....

10

2.1

I
NTRODUCTION

................................
................................
................................
.................

10

2.2

P
ROJECT
O
VERVIEW
................................
................................
................................
.........

10

2.3

P
ROJECT
D
EVELOPMENT AND
S
CHEDULE FOR
I
MPLEMENTATION

................................
.........

11

2.3.1

Basic Engineering and Environmental Scoping

................................
................................
.......

11

2.3.2

Detailed Engineering and Environmental and Social Impact Assessment (ESIA)

..................

11

2.3.3

Construction Schedule Overview
................................
................................
.............................

12

2.3.4

Interaction with Other Pipelines

................................
................................
...............................

12

2.4

B
ASIS OF
P
IPELINE
D
ESIGN

................................
................................
...............................

13

2.4.1

General

................................
................................
................................
................................
....

13

2.4.2

Pipeline

Diameter and Materials

................................
................................
..............................

13

2.5

P
IPELINE
R
OUTE

................................
................................
................................
..............

13

2.6

A
BOVE
G
ROUND
I
NSTALLATIONS

................................
................................
.......................

14

2.6.1

Overview

................................
................................
................................
................................
..

14

2.6.2

Compressor Stations

................................
................................
................................
...............

14

2.6.3

Block Valve

................................
................................
................................
..............................

14

2.6.4

Pigging Station

................................
................................
................................
.........................

16

2.6.5

Pressure Reduction and Metering Station

................................
................................
...............

16

2.7

C
ONSTRUCTION
-
R
ELATED
A
NCILLARY
F
ACILITIES

................................
...............................

20

2.7.1

Access Roads

................................
................................
................................
..........................

20

2.7.2

Construction Camps

................................
................................
................................
................

20

2.8

R
EINSTATEMENT

................................
................................
................................
..............

22

3

LEGAL AND REGULATORY

BACKGROUND

................................
................................
.....

23

3.1

K
EY
G
EORGIAN
L
EGAL
P
RINCIPLES
P
ERTAINING TO
L
AND
A
CQUISITION

...............................

23

3.1.1

Overview of Key Legislation

................................
................................
................................
....

23

3.1.2

Overarching Principles in the Constitution

................................
................................
...............

23

3.1.3

Ownership and Use Rights

................................
................................
................................
......

23

3.1.4

Expropriation

................................
................................
................................
............................

24

3.1.5

Land Use Changes and Valuation

................................
................................
...........................

25

3.2

H
OST
G
OVERNMENT
A
GREEMENT

................................
................................
.....................

26

3.3

R
ESTRICTION
Z
ONES AND
C
ONSULTATION
Z
ONES

................................
..............................

28

3.3.1

Pipeline

................................
................................
................................
................................
....

28

3.3.2

Above Ground Installations (AGIs)

................................
................................
..........................

28

3.4

I
NTERNATIONAL
R
EQUIREMENTS

................................
................................
.......................

29

3.4.1

IFC Land Acquisition Reference Framework

................................
................................
...........

29

3.4.2

Other International Guidelines (Equator, E
BRD, OECD, ECAs)

................................
.............

29

3.5

G
AP
A
NALYSIS

................................
................................
................................
.................

30

4

SOCIO
-
ECONOMIC CHARACTERIS
ATION OF AFFECTED CO
MMUNITIES AND
PEOPLE

................................
................................
................................
................................

32

4.1

P
URPOSE OF
S
OCIO
-
E
CONOMIC
I
NVESTIGATIONS

................................
...............................

32

4.2

G
EOGRAPHIC
O
VERVIEW OF THE
P
ROJECT
A
REA

................................
...............................

32

4.3

S
OCIO
-
E
CONOMIC
C
HARACTERISTICS OF TH
E
A
FFECTED
P
OPULATION

................................

32

4.3.1

Methodology

................................
................................
................................
............................

32

4.3.2

Household Structure and Socio Demographic Features

................................
.........................

36

4.3.3

Household Conditions, Equipment and Access to Utilities

................................
......................

37

4.3.4

Land Ownership

................................
................................
................................
.......................

39

4.3.5

Occupations and Livelihoods

................................
................................
................................
...

40

4.3.6

Access to Education

................................
................................
................................
................

42

4.
3.7

Access to Services

................................
................................
................................
..................

43

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4.3.8

Health Status

................................
................................
................................
...........................

44

4.3.9

Social Ills

................................
................................
................................
................................
..

44

4.3.10

Per
ceptions and Expectations

................................
................................
................................
.

45

4.4

L
AND
U
SE AND
L
AND
T
ENURE IN
P
ROJECT
A
FFECTED
A
REAS

................................
.............

45

4.4.1

General Background

................................
................................
................................
................

45

4.4.
2

CSG1 and Pipeline Loop

................................
................................
................................
.........

46

4.4.3

CSG2 and Access Road

................................
................................
................................
..........

47

4.
4.4

PRMS

................................
................................
................................
................................
.......

48

4.5

C
ONCLUSIONS
R
ELEVANT TO
I
MPACT
A
SSESSMENT AND
C
OMPENSATION
P
LANNING

............

49

5

PROJECT LAND NEEDS

................................
................................
................................
......

50

5.1

P
IPE
LINE
C
ONSTRUCTION
C
ORRIDOR

................................
................................
................

50

5.2

P
IPELINE
L
AND
P
URCHASE
C
ORRIDOR

................................
................................
...............

50

5.3

P
IPELINE
L
AND
N
EEDS

................................
................................
................................
......

50

5.4

AGI

P
ERMANENT
L
AND
N
EEDS

................................
................................
..........................

53

5.5

T
EMPORARY
,

C
ONSTRUCTION
R
ELATED
L
AND
N
EEDS

................................
........................

54

6

LAND ACQUISITION AND

COMPENSATION STRATEG
Y AND PROCESS

.......................

55

6.1

K
EY
P
RINCIPLES OF
SCPX

L
AND
A
CQUISITION
S
TRATEGY

................................
..................

55

6.2

L
AND
I
MPACTS AND
A
SSOCIATED
C
OMPENSATION
P
RINCIPLES

................................
............

55

6.2.1

Pipeline


Permanent

................................
................................
................................
..............

55

6.2.2

Pipeline


Temporary

................................
................................
................................
...............

58

6.2.3

AGIs


Permanent

................................
................................
................................
...................

58

6.2.4

AGIs


Temporary

................................
................................
................................
...................

58

6.3

C
OMPENSATION
E
NTITLEMENTS

................................
................................
........................

58

6.3.1

Eligibility

................................
................................
................................
................................
...

58

6.3.2

Entitlement Matrix

................................
................................
................................
....................

59

6.4

I
DENTIFICATION AND
C
OMPENSATION
P
ROCESS

................................
................................
.

60

6.4.1

Identification and Field Inventory

................................
................................
.............................

60

6.4.2

Compensation
Calculation

................................
................................
................................
.......

61

6.4.3

Offer and Negotiation

................................
................................
................................
...............

61

6.4.4

Establishment of Legal Documentation

................................
................................
...................

61

6.4.5

Contract Completion and Payment

................................
................................
..........................

6
1

6.4.6

Land Exit Agreement and Hand Back

................................
................................
.....................

62

6.5

C
OMPENSATION
R
ATES
................................
................................
................................
.....

62

6.5.1

Land

................................
................................
................................
................................
.........

62

6.5.2

Annual Crops

................................
................................
................................
...........................

64

6.5.3

Perennial Crops (Fruit Trees)

................................
................................
................................
..

68

6.5.4

Other Immoveable Assets

................................
................................
................................
.......

70

7

VULNERABLE PEOPLE

................................
................................
................................
.......

70

7.1

O
VERVIEW

................................
................................
................................
.......................

71

7.2

I
DENTIFICATION OF
V
ULNERABLE
P
EOPLE

................................
................................
..........

71

7.3

A
SSISTANCE TO
V
ULNERABLE
P
EOPLE

................................
................................
...............

71

8

GRIEVANCE MANAGEMENT

AND REDRESS

................................
................................
....

72

8.1

P
RINCIPLES AND
O
VERVIEW

................................
................................
..............................

72

8.2

A
NTICIPATED
C
ATEGORIES OF
G
RIEVANCES
................................
................................
.......

72

8.3

F
IRST
T
IER
(I
NTERNAL
)

OF
G
RIEVANCE
M
ANAGEMENT

................................
........................

74

8.4

S
ECOND
T
IER
(I
NDEPENDENT
)

OF
G
RIEVANCE
M
ANAGEMENT

................................
..............

74

9

MONITORING AND EVALU
ATION

................................
................................
.......................

75

9.1

O
VERVIEW

................................
................................
................................
.......................

75

9.2

I
NPUT AND
O
UTPUT
M
ONITORING

................................
................................
......................

77

9.3

O
UTCOME
M
ONITORING
&

E
VALUATION

................................
................................
.............

78

9.4

C
OMPLIANCE
M
ONITORING AND
C
OMPLETION
A
UDIT
................................
...........................

78

9.4.1

Compliance Monitoring

................................
................................
................................
............

78

9.4.2

Completion Audit

................................
................................
................................
.....................

79

10

DISCLOSURE

................................
................................
................................
.......................

81

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10.1

LACF

................................
................................
................................
..............................

81

10.2

GLAC

................................
................................
................................
..............................

81



Appendices

APPENDIX 1


MAPS OF THE ROUTE

................................
................................
.......................

82

APPENDIX 2


COMMITMENTS REGISTER

................................
................................
...............

83

APPENDIX 3


HOUSEHOLD SURVEY QUE
STIONNAIRE

................................
........................

87


List of
Tables

TABLE 1


LIST OF ABBREVIATION
S

................................
................................
.........................

7

TABLE 2


KEY DEFINITIONS

................................
................................
................................
......

8

TABLE 3


KEY HGA REFERENCES G
OVERNING LAND ACQUIS
ITION AND
RESETTLEMENT ISSUES

................................
................................
................................
....

27

TABLE 4


RESTRICTION AND CONS
ULTATION ZONES


PIPELINE

................................
....

28

TABLE 5


RESTRICTION AND CONS
ULTATION ZONES
-

AGIS

................................
............

29

TABLE 6


ANALYSIS OF GAPS IN
GEORGIAN LAND ACQUIS
ITION LEGISLATION
AGAINST IFI REQUIREM
ENTS

................................
................................
............................

31

TABLE 7


LIST OF PROJECT AFFE
CTED COMMUNITIES (PA
CS)

................................
..........

33

TABLE 8


CSG1 / PIPELINE LOOP

LAND OWNERSHIP, LAND

USES AND MEAN PLOT
SIZE

................................
................................
................................
................................
.......

46

TABLE 9


CSG2 / ACCESS ROAD L
AND OWNERSHIP, LAND
USES AND MEAN PLOT
SIZE

................................
................................
................................
................................
.......

47

TABLE 10


PRMS LAND OWNERSHIP,

LAND USES AND MEAN P
LOT SIZE

........................

49

TABLE 11


AGI PERMANENT LAND N
EEDS

................................
................................
...........

53

TABLE 12


TEMPORARY CONSTRUCTI
ON LAND NEEDS

................................
.....................

54

TABLE 13


ENTITLEMENT MATRIX

................................
................................
..........................

59

TABLE 14


LAND AVERAGE MARKET
VALUE

................................
................................
........

63

TABLE 15


CALCULATED COMPENSAT
ION RATES BASED ON C
URRENT MARKET
VALUE (GEL/HA)

................................
................................
................................
..................

63

TABLE 16


CURRENT MARKET VALUE
S COMPARED TO 2002 B
TC / SCP
COMPENSATION RATES
-

(GEL/HA)

................................
................................
..................

64

TABLE 17


LAND COMPENSATION RA
TES (GEL/HA)

................................
............................

64

TABLE 18


YIELD AND PRICE DATA

FOR ANNUAL CROPS
-

GARDABANI

.........................

65

TABLE 19


YIELD AND PRICE DATA

FOR ANNUAL CROPS
-

TSALKA

................................

66

TABLE 20


YIELD AND PRICE DATA

FOR ANNUAL CROPS
-

AKHALTSIKHE

.....................

66

TA
BLE 21


COMPENSATION RATES F
OR ANNUAL CROPS
-

GARDABANI

.........................

67

TABLE 22


COMPENSATION RATES F
OR ANNUAL CROPS
-

TSALKA

................................

67

TABLE 23


COMPENSATION RATES F
OR ANNUAL CROPS
-

AKHALTSIKHE

.....................

68

TABLE 24


COMPENSATION RATES F
OR PERENNIAL CROPS

................................
............

69

TABLE 25


A
VERAGE YIELDS CONSID
ERED FOR THE CALCULA
TION OF
COMPENSATION RATES

................................
................................
................................
.....

70

TABLE 26


COMPONENTS OF MONITO
RING AND EVALUATION

................................
.........

76

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TABLE 27


INPUT AND OUTPUT IND
ICATORS

................................
................................
.......

77

TABLE 28


OUTCOME INDICATORS

................................
................................
........................

78


List of Figures


FIGURE 1


HIGH LEVEL VIEW OF T
HE PROPOSED SCPX SCH
EME

................................
....

11

FIGURE 2


SCH
EMATIC DIAGRAM OF SC
PX

................................
................................
..........

11

FIGURE 3


HIGH LEVEL TIME SCHE
DULE OF THE SCPX PRO
JECT

................................
....

12

FIGURE 4


PIPELINE ROUTE OVERV
IEW

................................
................................
................

15

FIGURE 5


INDICATIVE LOCATION
OF CSG1

................................
................................
.........

17

FIGURE 6


INDICATIVE LOCATION
OF CSG2

................................
................................
.........

18

FIGURE 7


INDICATIVE LOCATION
OF PRMS

................................
................................
.........

19

FIGURE 8


ACCESS TO CSG2

................................
................................
................................
..

21

FIGURE 9


LAY
-
OUT OF CONSTRUCTION
CORRIDOR AND RESTRIC
TION ZONES 1
AND 2


SCPX PARALLEL
TO BTC / SCP

................................
................................
..........

51

FIGURE 10


LAY
-
OUT OF CONSTRUCTION
CORRIDOR AND RESTRIC
TION ZONES 1
AND 2


SCPX DEVIATING FROM
BTC / SCP

................................
................................
....

53

FIGURE 11


POTENTIAL ORPHANED L
AND SITUATION

................................
.......................

57

FIGURE 12


PRINCIPLES OF THE GR
IEVANCE MANAGEMENT A
ND REDRESS
MECHANISM

................................
................................
................................
.........................

73



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Reference

Comments

1



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1

INTRODUCTION

1.1

P
URPOSE

OF THIS
D
OCUMENT

This document is the Land
Acquisition
and Compensation Framework for the South Caucasus
Pipeline
Expansion
(SCPX) project

activities in Georgia
.

It is part of the overall Environmental and
Social Assessment process for this project. In addition to the present introductory section, it
includes
the following chapters:

2.

Project description

3.

Legal and regulatory background

4.

Socio
-
economic characterisation of the affected population

5.

L
and acquisition impacts

6.

Land acquisition and c
ompensation strategy

and process

7.

Vulnerable people

8
.

Grievance management and redress

9
.

Monitoring

10.

Disclosure


1.2

A
BB
REVIATIONS


Table 1


List of Abbreviations


Abbreviation

Description



f湣n E㈮㔴


-
2

metre)

AGI

Above Ground Installation

APLR

Association for Protection of Landowners’ Rights

B慲a

B慲ad慵ge

BqC

B慫u
J
q扩li獩
J
C敹桡n

mip敬i湥

䍓C

C潭灲敳獯r pt慴楯渠d敯rgia

䕂剄

b畲潰敡渠䉡n欠for o散e湳瑲畣ti潮 慮d a敶敬潰m敮t

䕃b

bx灯rt Cr敤it Ag敮捹



bq畡tor mri湣n灬敳

bpfA

b湶ir潮m敮t慬 慮搠卯捩al fm灡捴 A獳敳sm敮t

dbi

d敯rgi慮 䱡ri

d䱁C

d畩摥 to 䱡湤 Acq畩獩ti潮 慮搠䍯m灥湳nti潮

edA

e潳琠d潶敲湭敮t Agreem敮t

f䙃

f湴nr湡ti潮慬 䙩湡湣n Cor灯rati潮

f䙉

f湴nr湡ti潮慬 䙩湡湣n慬 fn獴it畴楯n



千倠
hil潭整


m潩湴

Ede潲gi愻ahm〠Mt Az敲扡ej慮Ld敯rgi愠䉯r摥rF

hm EAzF

pCm hil潭整r攠偯e湴
EAz敲e
a
i
j慮X hm〠Mt p慮g慣桡lF

䱁Cc

䱡湤 Acq畩獩ti潮 慮搠䍯m灥湳nti潮 䙲cm敷潲o


m
o

k慴楯湡l Ag敮捹 of t桥
m畢li挠
o敧i獴ry

lbCa

lrg慮i獡ti潮 for b捯comi挠C潯灥r慴楯渠慮n a敶敬潰m敮t

偁m

mr潪散t Aff散t敤 Commu湩ty

偁m

mr潪散t Aff散t敤 m敯灬e

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PR

Performance Requirement

PRMS

Pressure Reduction and Measuring Station

PS

Performance Standard

Q

Quarter

RAP

Resettlement Action Plan

RoW

Right of Way

SCP

South Caucasus Pipeline

UK

United Kingdom of Great Britain and Northern Ireland

USD

Dollar of
the United States of America


1.3

K
EY
D
EFINITIONS

Table 2


Key Definitions


Term

Meaning

in this document

Project

The South Caucasus Pipeline
Expansion
, as described in details in Chapter 2 of
this document

Compensation

Payment in cash or in kind for loss
of an asset or a resource that is acquired or
affected by the project.

Land
Acquisition

Land acquisition includes both outright purchases of property and purchases of
access rights, such as rights

of way.

Notary

Person that is legally empowered to
witness signatures, certify the validity of a
document, and to take depositions.

Physical
Displacement

Loss of dwelling or shelter as a result of project
-
related land acquisition which
requires the affected person(s) to move to another location.

Economic

Displacement

Loss of assets (including land) or access to assets that leads to loss of income
sources or means of livelihood as a result of project
-
related land acquisition or
restriction of access to natural resources. People or enterprises may be
econom
ically displaced with or without experiencing physical displacement.

Replacement
Value

This is usually calculated as the market value of the asset plus transaction costs
(e.g. taxes, stamp duties, legal and notarization fees, registration fees
,

and any
other such costs such as may be incurred as a result of the transaction or
transfer of property). In applying this method of valuation, depreciation of
structures and assets should not be taken into account. For losses that cannot
easily be valued

or compensated for in monetary terms, in
-
kind compensation
may be appropriate. However, this compensation should be made in goods or
resources that are of equivalent or greater value and that are culturally
appropriate. With regard to land and structures,

replacement costs are defined
as follows:

Agricultural land

t桥 m慲k整ev慬略 of l慮搠of e煵慬 灲潤畣瑩p攠畳u 潲o灯t敮ti慬
l潣ot敤 i渠t桥 癩捩湩t礠潦 t桥 affe捴敤 l慮搬d灬畳uth攠捯獴cof 灲数pr慴楯渠t漠l敶敬s
獩mil慲at漠潲o扥tt敲et桡渠t桯獥s潦 t桥 aff散t敤
l慮搬d慮搠tr慮獡捴楯渠捯ct猠獵捨 慳
regi獴rati潮 慮d tr慮sfer t慸敳e

Land in urban areas

th攠m慲ket v慬略 潦 l慮搠of 敱畩v慬敮t 慲敡a慮搠畳uI wit栠
獩mil慲a潲oim灲潶敤 infra獴r畣t畲u 慮搠獥rvi捥猠灲pfer慢ly l潣ot敤 i渠t桥 vi捩nity
of t桥 aff散t敤 l慮搬d 灬畳

tr慮獡捴i潮 捯ct猠獵捨c 慳a regi獴r慴楯渠慮搠tr慮sfer
t慸敳e

Houses and other structures

t桥 捯獴 of 灵r捨c獩湧 潲o 扵il摩湧 a 湥w
獴r畣t畲uI wit栠慮 ar敡 a湤 q畡lity 獩mil慲ato 潲 b整eer t桡渠t桯獥sof t桥 aff散瑥d
獴r畣t畲uI 潲o of r数慩ri湧 愠 灡rti慬ly 慦ae
ct敤 str畣瑵r攬e i湣n畤i湧 l慢潵r 慮d
contractors’ fees and transaction costs such as registration and transfer taxes.

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Term

Meaning

in this document

Vulnerable
People

Vulnerable or “at
J
risk” groups includes people who, by virtue of gender,
整桮e捩tyI ag攬 灨y獩捡c 潲o me湴慬 摩獡silityI

散e湯mi挠摩獡sv慮t慧e 潲 獯捩慬
獴慴畳 m慹 扥 mor攠慤v敲獥ey 慦a散t敤 批 摩獰s慣am敮t t桡n 潴桥rs 慮搠w桯
m慹 扥 limit敤 i渠 t桥ir 慢ilit礠 t漠 捬慩m 潲o ta步k 慤v慮t慧攠 of r敳ettl敭敮t
慳獩獴慮捥c慮搠r敬慴敤a摥v敬潰m敮t 扥湥fit献 s畬湥r慢l攠gr潵灳pi渠t桥 捯湴
數t
of 摩獰s慣am敮t 慬獯si湣n畤攠灥潰l攠livi湧 扥low t桥 灯v敲ey li湥I t桥 l慮摬敳猬e
t桥 敬摥rlyI w潭敮
J

慮搠捨cl摲敮
J
桥慤敤 桯畳uh潬摳Ⱐ整桮e挠mi湯riti敳Ⱐn慴畲al
r敳e畲捥u摥灥湤敮t 捯mm畮iti敳eor 潴桥o 摩獰s慣a搠灥r獯s猠w桯 m慹 湯t 扥
灲潴散t敤 t桲潵gh n
慴楯n慬 l慮搠捯d灥湳nti潮 or l慮搠ditling legi獬慴楯渮


1.4

C
OMMITMENTS
R
EGISTER

Commitments made in this document, specific to land acquisition and compensation, are tracked
through a Project Commitments Register as clear unambiguous commitments.
Commitments

in the
document are followed by an indication such as “(
LACF 0
12
)” in italics and in brackets.
All
commitments in this document have been replicated for information in Appendix 2.

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2

P
ROJECT DESCRIPTION

2.1

I
N
TRODUCTION

This section describes the activities that
SCP Co.
will carry out in Georgia to construct,
commission, operate and maintain the part of SCPX pipeline that is located in the Republic of
Georgia. It gives a project overview that summarises the entire SCPX Pr
oject, and then describes
details of the design, construction, operating and decommissioning of the proposed pipeline in
Georgia.

2.2

P
ROJECT
O
VERVIEW

The SCPX Project
(“SCPX” or “Project”)
aims at increasing the capacity of the existing SCP
pipeline, which
o
riginates in Sangachal near Baku in Azerbaijan and ends at the Georgia Turkey
border between Akhaltsikhe (Georgia) and
Posof
(Turkey). SCP
has been in operation since 2006

and transports gas produced in the Azerbaijan field of Shah Deniz located in the Cas
pian Sea
.


The Project
will include a combination of:



N
ew pipeline sections
in a length of about
388

km in Azerbaijan and 55 km in Georgia;



New Above Ground Installations (two compressor stations both located in Georgia);



Enhancement and expansions to ex
isting
SCP facilities
.


The following
new facilities and pipeline sections

are planned for the SCPX Project:



New 56” looped pipeline in Azerbaijan from
KP(Az)
57

on the SCP pipeline to KP
(Az)

445 at the border with Georgia



New 56” looped pipeline in Geor
gia from KP00 at the Georgian border to KP55



Two new Intermediate Compressor Stations, CSG1 and CSG2 both located in Georgia.
CSG1 tied into both the existing 42” SCP and the new 56” SCPX pipelines at KP03,
and CSG2 operating only on the existing 42” SCP p
ipeline at KP142



New Azeri


Georgian Border Custody Metering Facility and intermediate pigging
facilities (within CSG1)



New Georgian Fiscal Metering and Pressure Reduction Facility (within CSG1)



New Georgian


Turkish Border Pressure Reduction and Custody

Metering Station
(PRMS), expanding the existing SCP facility
, also referred to as Area 81



Five new block valve stations in Azerbaijan



One new block valve station in Georgia



New intermediate pigging station at KP55 (Area 74), to pig the SCPX 56” loop in
Ge
orgia back to CSG1. The pigging station will also include an isolation valve
(effectively functioning as a second block valve station in Georgia).


The figure
below presents
a high
-
level regional map showing the existing BTC/SCP pipeline routes
in Azerbaij
an and Georgia to the border with Turkey. The
majority of the
56” SCPX pipeline
parallel
s

the existing SCP pipeline as described above.


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Figure

1


High


level view of the proposed SCPX scheme



The proposed SCPX pipeline loop and associated AGIs are
shown in

Figure 2
.

The start point for
the new 56” pipeline loop is at SCP KP57 in Azerbaijan. It crosses the border into Georgia, and
subsequently continues alongside the existing 42” SCP pipeline for 55km past the Georgian
border.


Figure

2


Schematic


diagram of SCPX




2.3

P
ROJECT
D
EVELOPMENT AND
S
CHEDULE FOR
I
MPLEMENTATION

2.3.1

B
asic Engineering and Environmental Scoping

The basic engineering carried out in 2010 generated a conceptual design for the whole of the
SCPX Project. An integral part of that proces
s was an assessment of the optimum length of the
pipeline and the location of the associated AGI facilities in the Georgia section of the SCPX
Pipeline Project.
Preliminary e
nvironmental
and social
baseline surveys were
then
carried out
with
a view to
minimising

amongst others, impacts of land acquisition
.

2.3.2

D
etailed Engineering and Environmental and Social Impact Assessment (ESIA)

Detailed engineering started in 2010 and continued in 2011. International ESIA consultants
RSK
were appointed to produce
the

ESIA. The entire route of the proposed SCPX pipeline loop has
been walked and surveyed by engineers and environmental specialists, including topographical
survey teams and ecologists
3T
,
3T

and reviewed from the perspective of land acquisition impacts too
w
ith the objective of avoiding any dwelling.
Stakeholders in Georgia were consulted to gain local
knowledge of the proposed pipeline route and the locations of the associated AGIs. This enabled
preferred locations for the pipeline route and the AGIs to be s
elected and specific locations to be
identified and fully assessed.

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It should be noted that the high level of interface between the basic/detailed engineering and ESIA
including assessment of land impacts has led to the situation where this report now de
scribes and
assesses a near defined project design for the permanent facilities and the pipeline route. As the
Project progresses towards completion of detailed engineering, refinements to the design are likely
to be made which may include potential route

modifications. Comparable assessment techniques
to those described within this document will be applied as part of a management of change
process, before any changes are approved.


2.3.3

Construction Schedule Overview

Preliminary n
egotiations for land acquisit
ion commenced in
Q3, 2011
for the Georgian AGIs,
and
will
proceed to the looped sections of pipeline from Q2, 2012.

Early construction works including
preparation of roads and temporary construction camp and laydown areas will commence in Q2
2013. Manpowe
r and equipment
will be mobilised to construct
CSG1 between Q4 2013 and Q3
2015. CSG1 will be commissioned in Q1 2016. The construction activities associated with the
PRMS will also take place during this period. Construction of the CSG2 will start in Q1 2
015 and be
completed in Q4 2016, with commissioning Q2 2017. The Pipeline construction crews will be
mobilised in Q2 2015. The pipeline will be commissioned during Q3 2017 ready for gas export in
Q4 2017
.

The figure below shows a simplified implementation
schedule.


Figure 3


High level time schedule of the SCPX project



2.3.4

Interaction with Other Pipelines

Where practicable, the SCPX pipeline will be installed adjacent to and in the same corridor as the
existing SCP and BTC pipelines

.

A detailed study was carried out that determined that a minimum
20m separation distance must be allowed between the SCPX pipeline and the existing pipelines to
prevent the rupture of one of those pipelines from damaging either of the other pipelines and
c
ausing loss of integrity

. The study considered internationally accepted standards for pipeline
construction. It also took account of the need to allow sufficient space for trucks to deliver pipe and
machinery, trench excavation and heavy plant lowering th
e welded pipeline sections into the pre
-
excavated trench without interference to the neighbouring pipelines.


Where constructability issues make the existing Right of Way (ROW) unsuitable for parallel lay, the
separation distance will need to be increased
.

In specific situatio
ns, and based on a case

by

case
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review, the interval might be reduced to a
n absolute minimum of 17 metres, subje
c
t to

the results
of a risk assessment,
with
the installation


of
additional pipeline precaution measures

if required
.


2.4

B
ASIS OF
P
IPELINE
D
ESIG
N

2.4.1

G
eneral

The
SCP Georgia Host Government Agreement (HGA) requires that the project

environmental
standards

conform to
(1) international Natural Gas pipeline industry environmental standards and
practice generally observed by the int
ernational community for comparable projects to SCPx and
(2) World Bank standards and practices.
In addition, t
hese standards/practices must be no less
stringent than those applied in the UK


Design Life
.


Once constructed, the new SCPX pipeline is expect
ed to have a 30 year design life. This will be
achieved by ensuring that the pipeline is adequately protected externally with a three layer high
density polyethylene (HDPE) coating system that will insulate the exterior surface of the pipeline
from the sur
rounding soil. This coating will reduce the potential for induced current corrosion and
biological and chemical attack on the pipeline. During pipeline construction in the field, an
additional coating will be applied to the pipe joints after welding the pi
peline sections together
successfully. The pipe will be protected internally with an applied lining that will enhance the
hydrau
lic properties of the pipeline and
will be installed with a minimum depth of cover of 1.0m
above
the top of the pipeline.

Where
there is an increased risk of damage or interference,
additional protective measures will be adopted as approp
r
iate, including: increasing pipe wall
thickness, increasing the depth of cover (e.g. cover may be increased to 1.5m at road and rail
crossings),
using pipeline marker tape, installing protective concrete slabs or setting in concrete .


Regular monitoring and maintenance of the pipeline will be needed to ensure the safe and
continued operation of the pipeline system. It will place a particular emphasis on geo
-
hazards and
third party interference.

2.4.2

Pipeline Diameter and Materials

The SCPX

pipeline will have an external diameter of 56” (1422mm). It will be manufactured from
steel with a seam welded using submerged arc welding (SAW) processes. The plate thickness will
be calculated to give the pipeline a suitable wall thickness for the condi
tions where it will be used.
To meet the requirements of the relevant codes and authorities, the line

pipe to be used at road
and rail crossings will have thicker walls than the normal line

pipe

.



The SCPX pipeline loop will have an impressed current cat
hodic protection system. BP will assess
whether the existing SCP cathodic protection system can be upgraded to allow integration of the
SCPX pipeline

. Otherwise, anode ground beds, transformer rectifiers and utility supplies will be
installed for the SCPX

pipeline.


2.5

P
IPELINE

R
OUTE

In Georgia, the new SCPX
pipeline will follow the route of the
existing
SCP
line
from the border
with Azerbaijan, to a location to the north
-
west of Marneuli (a distance of nearly 55 km). After this
point the increased gas flow
will continue to the border with Turkey in the
existing
SCP

line
.


The pipeline route is shown

in

Figure 4
below.

The pipeline route deviates from the route of the
SCP pipeline in a few locations (for example between KP24
-
26 and KP 28)
, where constraints
including the presence of 3
rd

party pipelines mean slight deviations from the SCP route are
necessary
.


In order to be able to identify the location of the buried pipeline, low level marker posts will be
provided along the pipeline route.


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2.6

A
BOVE
G
ROUND
I
N
STALLATIONS

2.6.1

Overview

The following AGIs are integral components of the SCPX Project in Georgia:



CSG1 comprising of a Georgia/Azerbaijan metering station; a pigging station; the BTC
fuel gas offtake for pumping station PSG1; a Georgian gas offtake

point; and a
compressor station to maintain full operating pressure in the 42” SCP and the 56”
SCPX pipelines;



A Block Valve at KP 27.5;



A pigging station at the end of the pipeline loop at KP55, with a pig receiving facility
and a pipeline isolation valv
e (which acts a second block valve) (sometimes known
collectively as Area 74);



CSG2, a compressor station to maintain the full operating pressure in the existing 42”
SCP pipeline;



The PRMS (pressure reduction and metering station, known as Area 81) near t
he
Turkish border that will be an expansion of the SCP pipeline existing PRMS (known as
Area 80).


All the AGIs will be fenced and provided with appropriate security measures to prevent
unauthorised access by third parties

. The facilities at CSG1, CSG2 an
d the PRMS will be manned
at all times. The other installations will be operated remotely.


Where existing access roads lead to the SCPX AGIs,
as far as practicable, these

will be used
as
access routes
. In other cases, new access roads will be designed an
d built.


2.6.2

Compressor Stations


The first compressor stations, CSG1, will be located next to the existing BTC pump station PSG1
at KP03 near Jandari, in Gardabani municipality shown in Figure 5.


The second compressor station, CSG2, will be located on a gre
en field site near Rekha, in Tsalka
municipality at KP142 at 1,714m above sea level (ASL). The CSG2 site is shown in Figure 6.


2.6.3

Block Valve


The SCPX Pipeline needs one block valve so the pipeline loop can be isolated for maintenance, or
in case of emerge
ncy.


The block valve is a very small installation in a compound measuring approximately 100m
2
. Apart
from the operating valve stem, all of the pipe work inside the security fence is below ground. The
block valve station is a remotely operated installatio
n.


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Figure

4


Pipeline


route

overview



This map and the layout shown are tentative

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2.6.4

Pigging Station


The pigging station will be located at the end of the SCPX pipeline loop at

approximately KP55.
This will include a pig receiver and an isolation valve so the pipeline loop can be isolated for
maintenance or in case of emergency. It is unmanned except for those occasions when routine
inspections and maintenance are carried out.
The 56” pipeline loop will be connected to the
existing 42” pipeline within this station.


2.6.5

Pressure Reduction and Metering Station


The PRMS will be an expansion of the existing SCP pressure reduction station at the
Georgian/Turkish border crossing and
will be constructed adjacent to the SCP installation (Area
80) in an area also known as Area 81. The PRMS will include filters, custody metering, water bath
heaters, a vent and utility systems. The site is shown in

Figure 7
.


A gas inlet pipe will take ga
s from the 42” SCP pipeline into the PRMS, where it will pass through
custody metering filters and a custody metering package. The gas is then conditioned by gas fired
water bath heater packages and the pressure reduction package that will reduce the maxim
um
operating pressure of 90 bar gauge

(barg)

in the Georgian pipeline to a maximum of 75 barg in
order to meet the specification for the Turkish gas transmission network.


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Figure
5


Indicative


Location of CSG1



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Figure 6


Indicative Location of
CSG2




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Figure
7


Indicative

Location of PRMS



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2.7

C
ONSTRUCTION
-
R
ELATED
A
NCILLARY
F
ACILITIES

2.7.1

Access Roads

For the purposes of new pipeline construction, existing access roads may be used or temporary
access roads developed. Where practical, a pipeline
haul road within the ROW will be used to
convey materials, plant and equipment required to support pipeline construction. Personnel will be
transported between the accommodation camps and the ROW using the existing access road
network, and along the ROW vi
a the construction haul road
.


To provide adequate and safe access for equipment, materials and personnel to the CSG2
construction site all year round, a road with a 20 year design life that provides service access to
the facilities and allows delivery and

replacement of large pieces of equipment (e.g. compressor
drivers) will need to be built. The access route combines the use of sections of the existing roads
that are in good condition together with sections of roads that will need to be upgraded and
cons
truction of some sections of new road. Upgrading and/or widening existing routes will be
preferred over constructing new roads
, as far as practicable, and provided that the use of existing
roads does not pose a risk to community health and safety
.


Several

route options
were considered and option D1
(northern bypass of the village of Berta)
was
selected

(see

Figure 8
) with avoidance of impacts to settlements one of the key decision criteria
.
The route

start
s

at the existing “Millennium” Road, and run
s

in a
north
-
westerly direction along
gentle slopes for the first 6 km before climbing and turning north.


2.7.2

Construction Camps

An accommodation camp


and pipe yard
for CSG1
will be established
nearby the CSG1 site
, and
an accommodation camp for the pipeline will
be established


in the vicinity of Rustavi, where there
is
good

access
road
to the pipeline ROW
,
pipe yard and rail offloading area.


The construction camp and laydown area for CSG2 will be located close to the proposed
const
ruction site in order to minim
iz
e traffic.
Main construction activity at CSG2 will be restricted to
the snow
-
free period (from May to October) with lower activity levels during the winter months.


At the PRMS, a laydown area will be located close to the proposed construction site
. An
accommodation camp will be located
as close as practicable to
the construction site
at an exact
location yet to be determined
.


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Figure
8



Access


to CSG2



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2.8

R
EINSTATEMENT


Before construction commences, the construction contractor(s) will prepare a proj
ect
-
specific
reinstatement plan based on the project reinstatement specification. The full width of the ROW and
all other
temporary
project areas will be re
-
instated in accordance with the reinstatement plan on
completion of the works.


Reinstatement will
be undertaken
as early as practical


once all construction work is complet
e
.

Temporary works areas will be reinstated to near original condition (as compared to pre
-
construction survey reports or adjacent areas)
.



The first stage of the reinstatement prog
ramme will comprise the re
-
grading of all working areas to
return areas to near original condition
.

Any permanent erosion control measures needed (e.g.
diversion berms) would also be installed at this time.
Roads will be reinstated to at least original
condition after completion of works
.


To facilitate natural re
-
vegetation of the ROW, the separately stockpiled topsoil and vegetation
debris will be spread over the surface of the ROW following completion of grading. Some areas of
sensitive natural habita
t or high erosion potential may be seeded with a mixture of native plant
species to facilitate re
-
vegetation. If deemed necessary by BP, additional surface stabili
z
ation
measures may be adopted in areas of high erosion potential.


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3

LEGAL AND REGULATORY

BAC
KGROUND

3.1

K
EY
G
EORGIAN
L
EGAL
P
RINCIPLES
P
ERTAINING TO
L
AND
A
CQUISITION

Note: Rather than as a
n exhaustive
review of Georgian laws and regulations pertaining to land
acquisition
,

this section is intended as a summary of Georgian legal principles that are
considered
of relevance to the proposed SCPX land
acquisition
process.

3.1.1

Overview of Key Legislation

Key legislative and regulatory texts addressing land acquisition and resettlement include:



The Constitution (24 August, 1995)



The Law on the Procedures for E
xpropriation of Property for Necessary Public Need
(23 July, 1999)



The Civil Code (26 June, 1997)



The Law on Ownership Rights to Agricultural Land (22 March, 1996)



The Law “On Public Regist
ry
” of December 19, 2008 (Last amendment of December
20, 2011)



The
Law on Payment of Substitute Land Reclamation Cost and Damages in Allocating
Farm Land for Non
-
Farming Purposes (
October 2, 1997, as amended March 11, 2011)



The Law on Protection of Cultural Heritage



The Law on Notary Actions



The Civil Procedural Code (Nov
ember 14, 1997).


3.1.2

Overarching Principles in the
Constitution

The Constitution of Georgia recognizes universally acknowledged human rights principles,
including those pertaining to private ownership and its protection. The Constitution creates
foundation fo
r the legislative basis of possession of property. It recognizes the right of ownership
(Article 21, Part 1), and permits expropriation for necessary public needs, while requiring payment
of relevant compensation (Article 21, Parts 2, 3).


It is also impo
rtant to note that the Constitution establishes the clear principle that Georgian
citizens have the right to receive complete, unbiased and timely information about their working
and living environment (Article 37, Part 5). In addition, Georgian citizens
have a right of access to
information about themselves (Article 41, Part 1).


3.1.3

Ownership and Use
Right
s

3.1.3.1

Ownership Rights

O
wnership rights are established by the Constitution and confirmed by various pieces of
legislation
. The Civil Code further defines thre
e categories of owners:



Private persons, either natural or legal



Municipal entities



State entities.


3.1.3.2

Use Rights

All land is categorised either as agricultural or non
-
agricultural.

The
Civil Code also defines the
following use rights:



Right
-
to
-
build

is essentially a lease over a piece of land granted by the owner to
another legal entity for the purpose of erecting a structure on or beneath the land. The
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right thus defined is temporary
(no longer than 9
9 years), and either based on the
payment of a pr
ice or free
-
of
-
charge. The beneficiary of the right to build can alienate
the right to a third party (Articles 233
-
241). Right to build must be registered

in the
Public Regist
ry
.



Usufruct

right is defined as the right to use an immoveable object and can b
e exerted
jointly or separately from the ownership right over this same immoveable. It can be
transferred into use of another person or entity, so that the latter will be authorized to
use this object as its owner and not permit third parties to use it, bu
t, unlike the owner,
this person/entity does not have the right to alienate, hypothecate or be
queath this
object (Articles 242
-
2
46). Usufruct may be based on payment or free
-
of
-
charge.

Usufruct must be registered in the Public Registry.



Servitude
: a land
parcel or other immovable property can be used (encumbered) for the
benefit of the owner of another land parcel or other immovable property, so that the
property owner will have the right to use this parcel, or it will be forbidden for the owner
to carry o
ut certain activities on the parcel, or the use of certain rights of the owner of
the encumbered parcel (Articles 247
-
253). Servitude may be based on payment or
free
-
of
-
charge.

Servitude must be registered in the Public Registry.



Lease
: Under the lease A
greement, the lessor (owner) is obliged to transfer to the
lessee (user) defined property into temporary use and, in course of the lease term, to
ensure the possibility to harvest the crop, if it is produced, as income, as a result of
correct management of

the farming. The lessee is obliged to pay to the lessor the
agreed lease payment. Lease payment may be determined both in cash or in
-
kind
(Articles 581
-
606).

Lease must be registered in the Public Registry.



Rent
: Under the rent agreement, the person who
rents out the property (owner) is
obliged to transfer into use of the renter (user) the object, for a defined period of time.
The renter is obliged to pay to the owner the agreed rent amount (Articles 531
-
575).


3.1.3.3

Necessary Right of Way


“Necessary Right
-
O
f
-
Way” is regulated by the Civil Code of Georgia (Article 180). Necessary
Right
-
Of
-
Way can be invoked “if a tract of land lacks access to public roads, electricity, oil, gas and
water supply lines that are necessary for its adequate use”. The owner may the
n claim from a
neighbour to use his/her land parcel “for the purpose of providing the necessary access”.
“Necessary Right
-
Of
-
Way” is granted by a District Court based on an application by the
“neighbour” that must contain a justification of the urgency. Co
mpensation may either be amicably
agreed or be decided by the Judge further to the decision granting “Necessary Right
-
of
-
Way”.


Fundamentally “Necessary Right
-
Of
-
Way” is intended to allow a landowner to obtain right of way
through a neighbouring land parce
l for utilities serving his/her land parcel. It can be useful as a
legal instrument where expropriation cannot be used (easement rights) and amicable agreements
cannot be reached due to refusal or absence of affected landowners.


3.1.4

Expropriation

The law on t
he Procedures for Expropriation of Property for Necessary Public Need was adopted
on 23 July 1999 and describes when and how property can be expropriated. It defines the types of
activities that may be eligible to expropriation (Article 2). The expropriati
on process is as follows:



A decree of the President of Georgia must define the necessity of expropriation for
public interest and identify the expropriating agency or legal entity which will benefit
from the right of expropriation (Article 3)



For every pr
operty to be expropriated, the expropriating agency should publish a
description of the project and the property in the central and local press, and also
provide this information directly to each owner of affected properties (Article 4)



For each property,
the expropriating agency should submit a detailed application to the
regional court that presents the case for expropriation (Article 5)

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The court then considers the application and makes a decision whether to allow
expropriation. If the court does allow i
t, the court specifies which government authority
and/or legal entity will have the right of expropriation (Article 5)



If the court grants the right of expropriation, the expropriating agency should first seek
to reach agreement with the owner on the value

of the property or on a replacement
property offered as in
-
kind compensation (Article 6)



The agency, or a valuer hired (and paid) by the agency and agreed upon to by the
owner assesses the market value of the property. The expropriating agency then
notifi
es the owner of such value and how it was determined. The owner can also pay
for a separate valuation of the property at market value (Article 7, paragraph 1)



If crops are in place on an arable plot of land at the time of valuation, the appraised
market va
lue of the land has to include revenue that the owner would have received
from the observed standing crop in the current business year as part of the value
(Article 11). In the event that the plot is not cultivated at the time of valuation, this crop
reven
ue is not included.



The expropriating agency then would negotiate with the owner to reach agreement on
the amount of compensation that would be paid. The amount cannot be less than the
market value established by the expropriating agency’s appraisal. If and only if the
owner
agrees, the expropriating agency can propose in
-
kind compensation (other
property) to the owner as part of or in lieu of compensation (Article 7, paragraph 2).



If expropriating a property would make any other land related to the expropriated
property unus
able or less valuable, the owner of that other land would be compensated
in the same way as for the land needed by the expropriating agency. (Article 6,
paragraph 4)



If the owner and the expropriating agency cannot reach agreement, either party may
file a

lawsuit with the competent territorial court in accordance with the civil laws of
Georgia, and the court may then make a decision on compensation and/or replacement
land. (Article 8).


A specific legal issue with the Georgian Expropriation Law in its cur
rent formulation is that it cannot
be used to acquire rights other than full ownership. For example it cannot be used to acquire
easement rights, which is problematic for infrastructure such as pipelines and transmission lines. In
these cases, the project
sponsor can resort to
negotiated settlements
or Necessary Right of Way
(see below
3.1.4.3
)
, or seek to acquire property rights rather than easement

rights
.

3.1.5

Land Use Changes and Valuation

3.1.5.1

State Rates Established by Law on Farm Land Conversion

The “Law on Payment of Substitute Land Reclamation Cost and Damages in Allocating Farm Land
for Non
-
Farming Purposes” was adopted on 2 October 1997 and amended o
n 11 November 2007.
This law establishes the rules for changing land registered in the Public Registry as farm land to
non
-
farming use (which is the case wherever farm land is converted to industrial or infrastructure
use), including rules for valuing farm

land and compensating for damages. To change farm land to
non
-
farming land, the person applies to the National Agency of
the
Public Registry

(NAPR)
. The
applicant would usually have to pay to change the categorisation from farm land to non
-
farm land.
Howe
ver, no payment is due where land is converted in the interest of public need.


Where farm land is converted to non
-
farming purposes the land owner must be compensated. The
amount per hectare is established by the law and depends on the municipality where

the land plot
is located and its size. A table appended to the law shows the amount the law requires to be paid
to the owners.


3.1.5.2

Valuers and Valuation Practice

There are large numbers of companies and individuals on the valuation market in Georgia. The
ma
rket is mainly fuel
l
ed by commercial banks, professional auditors, and State agencies. There is
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currently no specific legislation regulating land and real estate valuation. The Association for the
Protection of Landowners’ Rights (APLR) runs a certificati
on process for professional real estate
valuers
1
. The certification is based on training and professional testing. The certification is not
mandatory to un
dertake valuation on behalf of S
tate agencies

or other clients such as commercial
banks
. Approaches used by the Georgian real estate valuers

do
not
necessarily
comply with the
IFI

replacement
value”
requirement. As mentioned above, the tables appended to the “Law on
Payment of Substitute Land Reclamation Cost and Damages in Allocating Farm

Land for Non
-
Farming Purposes” and the “normative prices” sometimes provide a benchmark. Some
agencies
have also used th
is

basis
used for
property tax

calculation
, applying a coefficient on top of it.


In summary, there is no accepted valuation methodolog
y, there are numerous players in the field of
valuation, which makes reaching some methodological consistency more challenging, and

replacement value


appraisal is used only where IFIs are involved.


3.2

H
OST
G
OVERNMENT
A
GREEMENT

The “
Host Government Agreemen
t Between and Among the Government of Georgia and the SCP
Participants
” (further “HGA”) establishes rights and obligations of the Government of Georgia and
the SCP Participants in respect of design, preparation, construction and operation of the SCP
pipeli
ne. The original SCP HGA covers the SCP expansion (SCPX) addressed in this document.


Key land acquisition principles in the HGA are contained in Articles 4 and 7 and more specifically in
Appendix 2, which is entirely dedicated to land rights and acquisit
ion issues. Pursuant to the HGA,
SCP Participants are granted the following rights by the Government of Georgia:



Exclusive rights in respect to State land necessary for the Project;



Subject to private arrangements entered into by the SCP Participants, excl
usive and
unrestricted rights to use, possess, control and construct on Permanent Land
necessary for the Project; and



The status and powers of taking, compulsory acquisition, eminent domain,
expropriation, or other similar delegated powers for the duration

of the project to
secure, maintain and pay reasonable compensation to affected persons for all rights to
land.


Appendix 2
of the HGA
defines the following areas of land (amongst others):



The “Construction Corridor” is an area of land thirty
-
six metres
wide within which the
centreline of the Pipeline Corridor will be located;



The “Pipeline Corridor” is an area of land within the Construction Corridor eight (8)
metres wide that contains the actual pipeline; and



“Permanent Land” means (i) the Pipeline Corr
idor and (ii) “those other areas of land
(contiguous or noncontiguous) designated in the SCP Participants’ sole discretion and
acquired by and/or granted to the SCP Participants for use as the locations upon or
under which the Facilities exist, from time t
o time, throughout the life of the Project”, in
other words all other facilities


and particularly AGIs


requiring land to be granted to
the SCP Participants for the life of the Project.


The table below elaborates on the three key sections of the HGA go
verning land acquisition and
resettlement.





1


http://www.certification.org,ge



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Table 3


Key HGA References Governing Land Acquisition and Resettlement Issues


Reference in the HGA

Summary of Provision

Article1.3 (Appendix 2)

The SCP Participants will be responsible for compensating all
landowners and occupiers of lands that are part of the Construction
Corridor or become part of the Permanent Land.

Article 7.3 (Appendix 2)

SCP Participants t
o use Best Endeavours to minimiz
e any
unreasonable disturbance, disruption, or inconvenience
caused to the
population and to agricultural land use in the selection, acquisition
and exercise of land rights.

Article 7.4 (Appendix 2)

SCP Participants to use Best Endeavours to give the landowners and
occupiers of land adjacent to the Construction Cor
ridor and/or
Permanent Land prior notice of construction works on the
Construction Corridor and/or Permanent Land. All movement of
pipes, vehicles and machinery for construction to be carried out as far
as reasonably practicable in accordance with a progr
amme of which
adjacent landowners and occupiers will be made aware.

Article 7.5 (Appendix 2)

Maintain necessary means of access and construct temporary
crossings that may be reasonably required by affected landowners
and occupiers. Following construction
and to the extent reasonably
practicable, private roads and footpaths will be reinstated to their
original condition, and made available to landowners pursuant to
terms agreed with the landowners and occupiers, but consistent with
the need to maintain the
security of project facilities and conduct
project activities.

Article 6.1 (Appendix 4)

In conducting project activities, SCP Participants shall use best
endeavours to minimize potential disturbances to surrounding
communities and the property of the inha
bitants.

Article 6.3 (Appendix 4)

Prior to the selection of the general location of facilities, complete a
general review of social conditions in the applicable areas, consisting
of a scoping study and a risk assessment. These will together form
the basis

of the content and structure for a social impact assessment
of project activities and associated operations to be conducted by the
SCP Participants with respect to social impacts to the Territory.

Article 6.4 (Appendix 4)

During the course of project act
ivities, SCP Participants shall from
ti
me to time,

confer with State Authorities as to the impact of ongoing
project activities in light of the social impact assessments.



In addition, Appendix 2 of the HGA provides that:



Subject to any private
arrangements entered into by the SCP Participants, the rights to
land granted to or obtained by the SCP Participants shall be enforceable by the SCP
Participants against all State Authorities and against all third parties;



Except for State Land, the SCP Pa
rticipants shall exercise their powers, as granted to
them in the HGA, to obtain the Construction Corridor and to obtain and maintain the
Permanent Land as necessary, and shall compensate all landowners and occupiers of
such lands which are a part of the C
onstruction Corridor or become part of the
Permanent Land in accordance with such grant and applicable Georgian Law; and



The SCP Participants shall have no obligation to pay the State Authorities any
compensation, other than reimbursements of actual verif
iable costs, in respect to any
land or Rights to Land. However, The SCP Participants shall compensate the State for
any State Land that was used for agricultural purposes but, as a result of becoming a
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part of the Construction Corridor and/or Permanent Lan
d, was disabled from
agricultural use.


3.3

R
ESTRICTION
Z
ONES AND
C
ONSULTATION
Z
ONES

3.3.1

Pipeline

According to the latest Pipeline Zoning Regulations
2

in Georgia, the following restriction zones are
applicable to the pipeline (Table below):


Table 4


Restriction
and Consultation Zones


Pipeline


Restriction zones

Consultation zones

Zone 1

Zone 2

Zone 3

4 metres

to either
side of each pipeline

15 metres

to either
side of each pipeline

Zone 3


1

385 metres

to either
side of each pipeline

Zone 3


2

500 metres

to either
side of pipeline


These pipeline protection zones meet international design standards and engineering good
practice, as required by the HGA. Applicable provisions within each of the three zones are the
following:



Zone 1 is four meters to either side of each pipeline. It is the most restrictive zone with
building construction, tree planting, deep ploughing, and use of explosives being
prohibited.



Zone 2 is 15 meters to either side of the pipeline. It prohibits cons
truction of habitable
buildings in this area, effectively creating a 30
-
meter wide corridor where such a
restriction will apply. Owing to the presence of BTC/SCP, this land will also be under
re
-
use restrictions.



Zone 3 is a so
-
called “consultation zone”,
500 meters in width to either side of the
pipeline where the project has to be consulted regarding development applications to
ensure minimal risk to the pipeline and resultant risk to surrounding communities.
There are no restrictions on individual landow
ners in this zone. Within the 15 to 385

m
area, all housing developments are subject to consultation with the pipeline operator.
Within the 385


500 m area, only major developments such as hospitals, schools and
large housing developments are subject to c
onsultation with the pipeline operator.


In addition, the HGA and BP engineering documents define other obligations relating to submitting
the following activities to prior consent from the Operator; pile driving (50m); use of explosives
(500m); alteratio
n of riverbeds within 5km upstream/downstream of the pipeline crossing; and
occupation of the construction corridor without prior consent from the Operator.


3.3.2

Above Ground Installations (AGIs)

According to the new Pipeline Zoning Regulations in Georgia, the

following restriction and
consultation zones are applicable to the above ground installations (table below):





2

Decree No 963 of President of Georgia, December 27, 2009, Tbilisi, “On Setting of Main Pipelines (Oil, Oil Products, Oil
By
-
Products and Natural Gas and Their Transformation Products) Protection Rule and Their Protection Zones”

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Table 5


Restriction and Consultation Zones
-

AGIs



Zone 1

Zone 2

Zone 3

CSG1

n/a

25m

385m

500m

CSG2

n/a

25m

385m

500m

Pigging Station

n/a

25m

n/a

n/a

PRMS

n/a

25m

n/a

n/a

Block Valve

n/a

25m

n/a

n/a



3